On February 19, 2020, the Seventh Circuit, aligning with previous decisions of the Eleventh and Third Circuits, held in Gadelhak v. AT&T Services, Inc. that a defendant’s dialing system did not constitute an “automatic telephone dialing system” (ATDS) under the meaning of the Telephone Consumer Protection Act where it was not capable of generating random and sequential numbers.
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On February 12, 2020, the FTC announced its intention to review its Endorsement Guides (formally known as the “Guides Concerning the Use of Endorsements and Testimonials in Advertising”). These guides, first enacted in 1980 and revised in 2009, provide guidance to businesses, influencers and endorsers on how to make sure endorsements or testimonials abide by the requirements of the FTC Act. While advisory in nature, the Commission can take action under the FTC Act if an endorsement or testimonial is inconsistent with the Guides.
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Since previous FCC interpretations of the Telephone Consumer Protection Act (“TCPA”) were invalidated by the DC Circuit in 2018, the definition of an “automatic telephone dialing system” (“ATDS”), has been hotly contested.
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On February 5, 2020, the FTC announced two settlements totaling nearly $3.4 million against Quantum Wellness Botanical Institute, LLC and their principals for claims made to older adults that the “ReJuvenation” pill was an “anti-aging wonder drug.” For example, they represented that the pill could boost HGH levels and add stem cells to the body, thereby repairing age, cell, and heart attack damage; reversing deafness or blindness; and reversing damage from any disease, including Alzheimer’s, Parkinson’s, and Crohn’s disease.
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On February 3, 2020, the FTC announced a $350,000 settlement with Shop Tutors Inc., d/b/a LendEDU, a website that ranks and rates consumer financial products such as student and personal loans. The FTC’s complaint alleged that LendEDU and its principals violated the FTC Act by misleading consumers into believing that their website offered consumers “objective,” “accurate” and “unbiased” information, despite the fact that the company was alleged to be selling rankings and ratings to the highest bidder.
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Innovation and developments in technology bring both opportunities and challenges for retailers, and Hunton Andrews Kurth has a sophisticated understanding of these issues and how they affect retailers. On January 23, 2020, our cross-disciplinary retail team, composed of over 200 lawyers, released our annual Retail Industry Year in Review.
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Responding to a challenge brought by HelloFresh (Grocery Delivery E-Services, USA), the National Advertising Division (NAD) affirmed that Home Chef (Relish Labs, LLC) offered reasonable grounds on which to base its claims that its meal kit delivery service offers consumers more flexibility than HelloFresh’s similar service. In particular, NAD noted that Home Chef’s “Customize It” feature provides ample variety, permitting consumers to upgrade or increase the amount of protein in their weekly meal selections, or even change recipes entirely by switching out the protein.
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On January 7, 2020, the Federal Trade Commission announced a settlement with Mortgage Solutions FCS, Inc., d/b/a Mount Diablo Lending, and its sole principal, Ramon Walker, to resolve allegations that the lender violated the FTC Act, the Fair Credit Reporting Act (FCRA) and the Gramm-Leach-Bliley (GLB) Act, by improperly disseminating consumers’ personal information on Yelp in response to consumers’ negative reviews posted to that site.
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The Ninth Circuit Court of Appeals dismissed a consumer-fraud class action lawsuit against Diet Dr Pepper maker Dr Pepper/Seven Up, Inc., holding that use of the word “diet” in the product’s name was not false or deceptive advertising in the proper context of the soft drink market.
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On December 5, 2019, the Federal Trade Commission announced a $4.1 million settlement against A.S. Research, the marketer of the dietary supplement Synovia. The Commission alleged that ASR mislead consumers by purporting Synovia could dramatically reduce or cure chronic joint pain, stiffness and swelling caused by arthritis, carpal tunnel syndrome, tennis elbow and muscular atrophy.
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